I am a CPA in Texas with an MBA from the University of Chicago. I have seen a lot and made many mistakes. Hopefully by now I will have learned something from them. Just as importantly, you may learn something from my mistakes. You can e-mail me by clicking on my "View my complete profile".

Tuesday, November 10, 2009

Yield Curve

Hellacious at Sudden Debt has an interesting 29 October 2009 post on the yield curve's (YC) shape: http://suddendebt.blogspot.com/2009/10/boundary-conditions.html. While agreeing with his conclusion, i.e., the YC will flatten, we disagree as to why the YC is so highly sloped and what its slope means. I say the YC will flatten when Zimbabwe Ben's hand is twisted by the foreign exchange markets and he is forced to let short-term interest rates rise. Well done Hellacious!